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viii City operations are also supported by other funds, including enterprise funds. Key enterprise funds include the Water Pollution Control Plant and Shoreline Enterprise Funds. Both of these funds have seen revenues slightly improving over the last year. The Water Pollution Control Plant Enterprise fund was established to account for the City’s sewers, which protect public health and preserve water quality through collection, treatment, and disposal of the community’s wastewater and wastewater solids. Program revenues to this fund in 2011-12 totaled $11.2 million, a 6.7% increase from the prior year. The Shoreline Enterprise Fund was established in 2002-03 and combined the Marina Enterprise and the Golf Course Enterprise Funds. Program revenues to this fund in 2011-12 totaled $1.9 million which remained constant from the prior year. While the City has implemented considerable expenditure/service reductions to balance its budget, it continues to face increased operating costs. For example, the City’s contribution rates for employee pensions continue to rise due to prior portfolio losses and a change in actuarial assumptions by CalPERS, with additional increases projected in future years. The City has offset some of these increases with reductions in staff reductions in recent years, and will be working with employee groups over the next couple of years to address this growing cost. Partially mitigating the double digit increases in annual CalPERS funding is the refinancing of a Police pension fund unfunded liability through lower interest cost bonds and loans totaling $24.3 million guaranteed by the General Fund, which were completed in 2011-12. The State of California is again forecasting a balanced budget over the next 18 months. The State’s savings and borrowings from special funds, property tax shifts, restructuring of the state-local government relationship that shifts funding responsibility to local government for certain services results in a shift of cost being transferred to cities and counties. State lawmakers’ dissolution of redevelopment agencies eliminates funding for redeveloping, improving and revitalizing project and blighted areas in the city. Passage of Prop 30 in November 2012 will generate additional tax revenue for the State to mitigate recent deficits. Local governments remain alert about how the State will balance its budget and how it might impact local government. Long-term perspective The City adopts an annual budget, but employs long-term planning as the framework for its fiscal decisions. While San Leandro’s underlying economy is viewed as positive in the long-term, today’s economic challenges, notably in the General Fund, must be dealt with now to ensure long-term fiscal stability. The City Council has implemented various cost cutting measures after operating expenditures peaked in 2008-09 to produce recurring budget savings. Such actions result in unwanted, but unavoidable reductions in service to the community. To help buffer the immediate impacts of additional service reductions, the City has used some of its one-time reserves. City Council unassigned reserves, total $10.7 million in the General Fund at June 30, 2012. The reserve balance is comprised of $5 million for Major Emergencies, $5.2 million for Economic Uncertainty, and $540,000 for compensated absences. It is anticipated that beginning in FY 2012-13, the City will begin to rebuild its reserve balance.